The law of comparative advantage says that a person should produce a good if she
A)has the greatest desire to consume that good
B)has the lowest opportunity cost of producing that good
C)has an absolute advantage in a related activity
D)has a comparative advantage in a related activity
E)is equally good at producing this good as someone else is

Question

Quizplus · Accepted Answer

The law of comparative advantage states that a person should produce a good if she has the lowest opportunity cost of producing that good. This means that the person can produce the good at a lower cost (in terms of other goods that could have been produced instead) than anyone else, making it more efficient for her to produce it.

The Law of Comparative Advantage Says That a Person Should